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CS Professional · Corporate Restructuring, Valuation and Insolvency · Accounting in Corporate Restructuring: Concept and Accounting Treatment

Jai Ltd merges into Kiran Ltd under common control. Jai follows straight-line depreciation while Kiran follows written down value for similar assets. What does Appendix C require?

Uniform accounting policies must be adopted. Under Appendix C, when the merging entities follow different policies, the policy difference is aligned and its effect is reported in line with Ind AS 8. Fair value revaluation and goodwill write-offs do not apply under pooling.

  1. AJai's assets be revalued to fair value to remove the difference
  2. BUniform accounting policies be adopted, with the effect of any change reported in accordance with Ind AS 8Correct
  3. CBoth policies continue indefinitely side by side
  4. DThe difference be written off to goodwill

Explanation

Appendix C requires that where accounting policies differ, they be unified on merger, and the effect of the change is accounted for under Ind AS 8. Revaluation is not part of pooling, and goodwill is not created.

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